Construction arm is star performer for Interserve

Grant Prior 12 years ago
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Interserve saw profit margins at its construction business rise above those in its support services division during the first half of this year.

Figures in the company’s results for the first half of 2010 show operating margins in the UK construction business rose to 2.9% from 1.7% last time.

The support services side of the business saw margins fall to 1.7% from 2.1% during the same period.

Construction contributed £23.5m to total operating profit on a turnover of £380m compared to £8.9m from support services on revenues of £538m.

More than half of Interserve’s construction work in the UK is in the PFI market or from framework deals.

Talking about future construction prospects, the firm said: “We expect this strong performance to continue in the near term, although we are more cautious on the outlook beyond 2011 when the impact of anticipated reduced public spending on capital projects would be felt.

“We are actively targeting new sectors, including waste and retail, to offset some of the potential
shortfall in work from our traditional segments such as education and custodial.

“Moreover, while the government has announced that there will be no new Building Schools for the Future projects, we believe that we are well placed to participate in any replacement programme of lower cost school buildings.”

Headline figures for the whole company show pre-tax profits fell to £27.3m from £40m last time on turnover down to £944m from £951m.

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